Definitions That Were Missing Flashcards
An individual or institutional investor who meet certain minimum requirement relating to income, net worth, or investment knowledge. Also referred to as a sophisticated investor.
Accredited investor
A charge levied by some mutual funds when clients close their accounts
Account closing fees
A plan offered by mutual fund company that enables investors to make automatic periodic purchases of units of a particular mutual fund.
Accumulation plan
Also known as front end load.
Acquisition fee
An investment management style employed by managers who believe financial markets present occasional inefficiencies which can be exploited to earn excess returns. Proponents of this approach will try to add value through strategies such as market timing and individual security selection.
Active portfolio management
The deemed cost of an asset representing the sum of the amount originally paid plus any additional costs, such as brokerage fees and commissions
Adjusted cost basis
Provincial and territorial securities administrators such as securities commissions or other regulatory bodies that operate within the provincial and territorial governments. Powers and operations include registration, disclosure, and investigation and prosecution.
Administrative bodies
A statistical measure of the value a fund manager adds to the performance of the fund managed. If output is positive, the manager has added value to the portfolio. If the offer is negative, the manager has underperformed the market.
Alpha
Professionally managed portfolios of basic asset classes and/or commodities and include segregated funds, hedge funds, commodity pools, exchange – traded funds, income, trusts, closed – end funds and principal protected notes.
Alternative managed products
Gradually writing off the value of an intangible asset over a period of time. Commonly applied to items such as goodwill, improvements to leased premises, or expenses of a new stock or bond issue.
Amortization
The period during which the entire principal amount of the mortgage loan is to be repaid to the mortgagee.
Amortization period
This cost reflects the fact that mortgages might have entered the portfolio when the market rate for them was different from their fixed rate.
Amortized cost
A document that contains information not included in a simplified prospectus or annual financial statements.
Annual information form
The person on whose life insurance benefits are based.
Annuitant
A sum of money invested with the life insurance company that is paid out to the investor based on a predetermined formula. The annual payouts are composed of both the initial amount invested and returns generated.
Annuity
Firms that engage in the business of collecting mutual fund performance information and report this information on a regular basis.
Appraisal firm’s
The simultaneous purchase and sale of securities traded on different exchanges.
Arbitrage transactions
I somewhat in accurate method of calculating average annual return. It involves adding up the annual returns and dividing by the number of years.
Arithmetic mean
The lowest price at which a seller will except for the financial instrument being quoted.
Ask price
The weight of the various components [Cash, debt, equity, and money market securities] of and investors portfolio.
Asset allocation
All things of value that are owned by a firm or individual.
Assets
The assets managed by an investment firm
Assets under management
Markets in which securities are bought and sold by brokers acting as agent for their clients, in contrast to a dealer market where trades are conducted over the counter. For example, the Trono stock exchange it is an auction market.
Auction market
A professional review and examination of the company’s financial statements required under corporate law for the purpose of ensuring that the statements are fair, consistent and confirm with international financial reporting standards.
Audit
An independent report on the accuracy and validity of the company’s financial statements.
Auditors report
A method that allows people to estimate the probability of an outcome based on how prevent or familiar that outcome appears in their lives.
Availability
A statistical tool used to measure the direction of the market. The most common average is the Dow Jones industrial average.
Average
The average of the simple annual returns earned over investment over a given number of years.
Average annual return
A type of sales fee that is paid by the investor when the funds are redeemed or sold. This fee is calculated on either the initial purchase value or the current price which includes any increase in value.
Back end load
Accounts maintained by a country to record international activities, such as foreign trade and international borrowing and lending. Balance of payments accounts actually comprised two separate accounts: the current accounts and the capital account.
Balance of payments
Hold a diversified portfolio of different types of securities: bonds, stocks, and money market securities. Often, the fund manager will vary the proportions depending on market conditions.
Balanced mutual funds
The minimum rate at which the Bank of Canada will lend money on a short-term basis to the chartered banks and other members of the comedian payments Association in its role as a lender of last resort.
Bank rate
A commercial draft drawn by a bore were for payment on a specified date. ABA is guaranteed at maturity by the borrowers bank. As with T-bills, BAs are sold at a discount and mature at their face value, with the difference representing the return to the investor. BAs may be sold before maturity at prevailing market rates,generally offering a higher yelled then Canada T-bill
Bankers acceptance
0.0001
Basis point
Assisting decline in equity prices. Bear markets are usually associated with a downturn in the business cycle.
Bear market
A bond that is not registered in the name of a particular investor and can be negotiated by any holder
Barrar bond
Systematic errors in financial judgment or imperfections in the perception of economic reality.
Behavioral biases
A field of study that combine psychology and economics to explain why and how investors act and how that the behavior affects financial markets.
Behavioral finance
And index or fund that enables you to compare the success of the fund or portfolio manager.
Benchmark
And index that reflects a mutual fund investment universe and can be used as a standard against which performance can be measured.
Benchmark index
The person who will receive the benefits payable under the contract upon death of an annuitant.
Beneficiary
An asset allocation where the risk and return levels are adjusted based upon the clients behavioral tendencies. The best practical at location may sweetly underperform over the long-term, but is in a location that the client can comfortably adhere to over the long run.
Best practical allocation
The standard measure of market risk. It shows how much a security or portfolio fluctuates when the market as a whole fluctuates.
Beta
Personal believes that may lead to irrational or emotional choices and decisions
Biases
The highest price at which a buyer will pay for the financial instrument being quoted.
Bid price
Those that hold the ultimate responsibility for mutual funds activities, ensuring that the investments are in keeping with the funds investment objectives.
Board of directors
A bond is a dead security then maybe issued by either a government or a corporation. The issuer of a bond promises to pay stipulated rate of interest and to pay back the principal or par value add maturity.
Bond
A fixed income fund that invests principally in government and corporate bonds
Bond fund
The person responsible for ensuring compliance with the regulatory requirements within the branch by monitoring the conduct of the mutual fund sales people
Branch compliance officer
General and prolonged rising trend insecurity prices. Bull markets are usually associated with an expansionary phase of the business cycle. As a memory aid, it is said that a bull walks with its head up while a bear walks with his head down
Bull market
A series of short-term fluctuations of national income over definite periods.
Business cycle
It is measured by the difference between the securities par value and the price the issuer must pay to call it for retirement
Call premium
May be redeemed upon due notice by the securities issuer
Callable preferred
And incentive program for those investing any registered education savings plan whereby the federal government will make a matching grant of a maximum of $500-$600 per year for the first $2500 contributed each year to the RESP of a child under age 18.
Canada education savings grants
A government-sponsored pension plan to which all employed residence in Canada contribute. Contribution to the blends is automatic. Starting from age 65, pensioners receive a modest monthly amount
Canada pension plan
I relatively new type of savings products that offers a higher interest rate compared to the Canada savings bond and is redeemable once a year on the anniversary of the issue date or during the 30 days thereafter without penalty
Canada premium bond
A type of savings product that pays a competitive rate of interest and that is guaranteed for one or more years. Not to be confused with marketable government bonds. Can Canada savings bonds do not trade on the secondary market – they are sold back to the government at par value plus accrued interest at any time. Canada savings bonds are registered in the name of an individual and,because of the redemption features, or not subject to interest rate risk like ordinary bonds
Canada savings bonds
The body that oversees mutual fund classification. The CI FSC tracks investment funds on the security by security holdings basis
Canadian investment funds standards committee
I non-for profit organization that establishes, operates, and maintains systems for the clearing and settlement of payments among member financial institutions on behalf of their clients – individuals, businesses, and governments.
Canadian payments association
Has two distinct but related meetings. To an economist, it means machinery, factories and inventory required to produce other products. To an investor, it may mean the total of financial assets invested in securities, a home and other fixed assets, plus cash.
Capital
One of the two accounts of the balance of payments that records the flow of payments between countries to finance the acquisition of assets such as stocks, bonds, and real estate.
Capital and financial account
When an investor cells and asset for more than its purchase price, I capital game is realized. Only 50% of capital gains is taxable; 50% remains tax-free.
Capital gain
An investment with the return objective will have an appreciable level of risk and will be expected to increase in value over the long-term. See also capital gains.
capital growth
Selling a security for less than its purchase price. Capital losses can only be applied against capital gains. Surplus of losses can be carried forward in definitely and used against future capital gains. Only 50% of the loss can be used to offset any taxable capital loss.
Capital loss
Pension is calculated as a percentage of employees earnings over the course of her career [While in the plan]. Employees may contribute a fixed percentage of their salary [such as 5%] to the type of plan. Employer contributions required to fund the defined-benefit very according to factors such as investment yield, morality and employee turnover.
Career average plan
In the case of RRSPs, it refers to unused contribution room that can be used to reduce taxable income in future.. In general, unused contributions can be carried forward in definitely.
Carry forward
An account in which no borrowing is permitted
Cash account
The amount of money coming in from all sources of income and the amount of money going out to pay bills.
Cash Floaw
A ratio that gages a companies ability to repay the funds it has borrowed. Cash flow divided by total debt ratio equals cash flow divided by total debt.
Cash flow from operations divided by total debt ratio
The central bank process of controlling the national money supply through the buying and selling of bonds in the markets
Cash management
The opposite of a nominee account. The client name account is in the account registered directly in the name of the client of the account with the mutual fund.
Client name account
This involves fully understanding and satisfying unique needs of each client.
Client service
Can often be repaid prior to the end of the term, but a penalty will apply.
Closed mortgage
Funds that have the flexibility to buy back their outstanding shares periodically.
Closed end discretionary funds
Shares of these funds are bought and sold on the open market. A fixed number of shares are issued and their value depends on market demand and on the value of the securities held by the fund.
Closed end fund
A code that establishes norms based upon the principles of trust, integrity, justice, fairness, honesty, responsibility and reliability.
Code of ethics
Basic statistical, information processing or memory errors that are common to all human beings. They can be thought of as blind spots or distortions in the human mind
Cognitive bias
A state of mental imbalance that occurs when contradictory cognitions bump into one another. This can occur when people are presented with information that conflicts with pre-existing beliefs.
Cognitive dissonance
Economic indicators that behave similarly and simultaneously with economy. Coincident indicators help economist to determine which phase of the business cycle and economy is currently in. Examples include gross to Mestic product, personal income, and retail sales.
Coincident indicators
Secures a bond by a pledge of an asset in the case of default
Collateral
The short-term debt security who is issuer promises to pay the maturity value by a stated date. Commercial paper is issued by very creditworthy companies and is therefore quite liquid.
Commercial paper
A special type of mutual fund that can employ leverage and engage in short selling using derivatives
Commodity pools
A comment share is said to represent residual ownership of the issuing company and is therefore entitled to a boat at shareholder meetings. It does not have a stated maturity date and is only paid dividends once preferred shareholders have been paid.
Common shares
A collection of portfolios that form the basis for comparison.
Comparison universe
Fulling the rules, whether those rules or legal requirements or dealer policies
Compliance
A reading indexed published monthly by the McDonald Laurier Institute which tracks the performance of the Canadian economy. The MLI index tracks the performance of nine components, and is published the last week of every month.
Composite leading index
The fact of reinvesting the returns on investments, so that investors can earn a return on a return.
Compounding
ETFs are not subject to individual stock or sector exposure limits that normally are part of the mutual funds investment objective. If particular sectors have had extraordinarily large gains, then it is possible for the ETF to be highly concentrated in a single stock [in excess of 10%] or sector [in excess of 40%].
Concentration risk
All information concerning the clients transactions and his or her accounts must be considered confidential and must not be disclosed except with the clients permission, for supervisory purposes or by order of the proper authority.
Confidentiality
A measure of the average of the prices paid for a basket of goods and services compared to a base year.
Consumer price index
The owner of the segregated fund contract
Contract holder
The phase of the economic cycle of that follows the peak drinking a contraction, economic activities decline
Contraction
A monetary policy that seeks to reduce the size of the money supply
Contractionary
Transferring securities into an RRSP. The general rules are that when an asset is transferred there is a deemed disposition. Any capital gains would be reported and taxes paid. Any capital losses that result cannot be claimed.
Contribution in kind
If you do not contribute the maximum allowable amounts to your RRSP in any given year, you can carry forward the unused contribution indefinitely to future years. The contribution room is the annual unused contribution carried forward.
Contribution room
When the amount of the mortgage loan does not exceed 75% of the appraised value of the pledged property.
Conventional mortgage
Can be converted to a given number of common shares, generally of the same company. Conversion is usually permitted during periods determined by the issuer or the issuer can force conversion if market conditions warrant it
Convertible bond
Can be converted to a given number of common shares, generally of the same company. Conversion is usually permitted during periods determined by the issuer or the issuer can force conversion if market conditions warrant it
Convertible preferred
Are issued by corporations mainly to finance the acquisition of equipment. They are subject to interest rate risk but, unlike government bonds, or also subject to default risk. Often, specific assets are pledged as collateral to guarantee a repayment of the debt.
Corporate bonds
A statistical measure of the degree to which the returns on a security or associated with the returns on another security.
Correlation
A type of inflation that develops due to an increase in the cost of production. For example, an increase in the price of oil may contribute to hire input costs for a company and could lead to higher inflation.
Cost push inflation
The promise made by the bond to make semi annual payments to the bondholder
Coupon
The periodic [almost always semiannual] interest payment that the issuer of a bond has promised to pay the bondholder.
Coupon rate
The grading of the company based on the company’s ability to pay back credit. High credit rating meaning means that the company is very likely to pay back loans and is not a default risk.
Credit rating
For these shares, dividends not paid in one period Will accumulate and be paid in a later period.
Cumulative preferred
The money used as a form of payment by a country
Currency
A contract between two parties that locks in the exchange rate for the purchase or sale of a currency on a future date
Currency forward contract
One of the two accounts of the balance of payments that records the net trade of goods and services, net payments of interest abroad and net transfers between countries.
Current account
Are the assets acted to be converted to cash within one year. Cash or cash equivalents are also considered current assets.
Current assets
Earned from fixed income funds that make regular interest or dividend payments to the holder. Generally, and investor seeking current income has the intention of living off the proceeds.
Current income
Are the liabilities that are expected to be settled within one year
Current liabilities
Liquidity ratio that is calculated by dividing of firms current assets by its current liabilities
Current ratio
Is computed by dividing the coupon or dividend payment for one year by the current market price of the security. The current yield is used to compare the short-term return on different securities. From money market mutual fund it is the last seven days annualized yield; it does not assume compounding of returns.
Current yield
Handles the disbursement and receipt of funds as well as the safekeeping of the securities. This function is performed by a trust company or bank.
Custodian
The type of unemployment that arises when the economy weakens and falls when it recovers
Cyclical unemployment
A dealer in which securities are bought and sold over-the-counter in which dealers act as principles when buying and selling securities for clients. Also referred to as the unlisted market
Dealer market
In a segregated fund the contract holders beneficiary or estate is guaranteed to receive payouts amounting to at least the original premiums invested by the contract holder, excluding sales commissions and certain other fees. The amount of the death benefit is equal to the difference, if any, between the net asset value of the pond and the original amounts invested.
Death benefits
Or bonds that have no assets pledged as collateral in the case of default
Debentures
Money borrowed from lenders for a variety of purposes. The borrower typically pays interest for the use of the money and is obligated to repay it at a set date
Debt instruments
The dead security, such as a bond, evidences a loan which has been made by the investor to the issuer. The issuer of a debt security essentially borrows money from the investor and thereby incurs a debt.
Debt security
Financial leverage ratio that determines the relationship of debt to equity
Debt to equity ratio
A legal document establishing the funds structure, indicating it’s principal investment objectives, investment policy, any restrictions on the buns investments, redefines trustee, manager and custodian will be, and the classes or series of units the fund may have, among other things.
Declaration of trust
Under certain circumstances, taxation rules state that the transfer of property has occurred, even without a purchase or sale, example, there is a deemed disposition on death or emigration from Canada.
Deemed disposition
This is the risk that a mortgage, bond, or preferred share will not make its anticipated interest or dividend payment, principal will not be repaid at maturity
Default risk
See back and load
Deferred sales charge
A type of employer-sponsored pension plan that allows the employee to determine the amount of the eventual pension benefits with relative accuracy. Generally, the benefits are a given percentage of the employees salary and are often based on the number of years of service
Defined benefit plan
The tendency of consumers to buy more of a good when it’s price decreases and the rest when it’s price increases
Demand
Inflation that occurs when demand in an economy outpaces supply
Demand pull inflation
Companies such as banks and trust companies, that pool the deposits of thousands of savers and then invest those funds in different types of investments
Deposit taking institution
The amount by which the value of fixed assets is periodically decreased to reflect the effects of regular wear and tear
Depreciation
Individuals that are available and willing to work but cannot find jobs and have not made specific efforts to find a job within the previous month
Discouraged workers
A decline in the rate at which prices rise – example, a decrease in the rate of inflation. Prices are still rising, but at a slower rate
Disinflation
The process of reducing investment risk by investing in different types of securities issued by companies active in different industries. Ideally, the securities will not all have the same response to economic and other events – as some decrease, others will hopefully increase.
Diversification
Dividends earned during ownership of shares
Dividend yield
Involves periodically purchasing a fixed dollar amount of mutual fund units. As the unit price fluctuates, so will the number of units purchased. By investing regular dollar amounts in an increasing market, the average cost per unit tends to be a lower over the long run
Dollar cost averaging
Persons that are duly registered as mutual fund sales representatives and life insurance agents
Dual employment
If markets are efficient, the prices of securities reflect all the information that exists about them
Efficient
Business activities, such as purchasing, distribution, sales, and other transactions, that take place by means of advanced communications and computer technologies.
Electronic commerce
A signature in digital form that is incorporated in, attached to, or associated with an electronic document.
Electronic signature
The price at which the quantity demanded equals the quantity supplied
Equilibrium price
The conduct of complying not only with the letter of the law but also with the spirit of the law
Ethical conduct
The responsibility of the investment guide to ensure that the clients needs are respected and placed before the guides own needs example attaining a sales target
Ethical responsibility
The moral principles that go beyond prescribed behavior and addresses situations where rules are unclear or contradictory
Ethics
The price at which one currency exchanges for another
Exchange rate
A dividend paid in addition to the regular dividend
Extra dividend
A finished product that is purchased by the ultimate end user
Final good
The mechanism through which suppliers and users of capital or matched
Financial markets
A professional holding a recognized that designation [CFP, CHP or PFP] who assists clients in establishing and reaching financial goals by analyzing current finances and making recommendations on reaching financial goals. The mutual funds sales representative is not expected to play the role of financial planner
Financial planner
The companies accounting year. Due to the nature of particular businesses, some companies do not use the calendar year for their bookkeeping. Typical example is the department store that finds December 31 two early date to close it’s books after the Christmas rush and so ends the fiscal year on January 31.
Fiscal year
And unmanaged pool of debt securities that all mature at the same time. The pool is created by an investment dealer within cells units of the pool to investors. Unlike a bond fund, I fixed trust as a limited life
Fixed trust
The risk that an unexpected change in exchange rates will alter the value of foreign assets or cash payments expected from a foreign source. This type of risk applies to global mutual funds.
Foreign exchange risk
Retail or institutional investors who reside outside of the country, but invest in that country
Foreign investors
The sales fee that the investor pays when the funds are purchased. This fee is generally not charged by banks or trust companies and is based on the dollar value invested
Front and load
Represents the link between a mutual fund and the investing public. A funds distributor is often it’s investment company
Fund distributors
A short mutual fund document designed to give investors key information that is relevant to their investment decisions, including facts about the fund itself, performance history, investments and the costs of investing in the fund.
Fund facts
A calculation that determines the average compound return over several time periods
Geo metric mean
A formula that defines the change in the ass set a location mix of a targeted date fund overtime, based on the number of years remaining to the target date. The closer the target date, the more conservative the asset mix
Glide path
And operating performance ratio that shows the companies rates of profit after allowing for cost of goods sold
Gross profit margin ratio
This plan is similar to a variable annuity. With this plan, the client purchases the plan and the plan option gives the plan holder the right to withdraw a certain fixed percentage of the initial deposit every year until the entire principle is returned, no matter how the fund performs
Guaranteed minimum withdrawal benefit plan
The transactional rate of return measure that takes into account all cash flows and increases or decreases in a securities value for any timeframe. Time frames can be greater or less than a year.
Holding period Return
Outlines the individual or family income and expenditures on a periodic basis with the intention of determining how much money will be available for savings and investment
Household budget
Under national instruments 81–107, Mutual funds must have an independent review committee which is required to either approve or consider conflicts of interest that are identified by the manager of the fund.
Independent review committee
The act of trading in securities based on undisclosed material non- public information
Insider trading
A bond or debenture issue in which a predetermined amount of principal matures each year
Installment debenture
A legal entity that represents the collective financial interests of a large group. A mutual fund, insurance company, pension fund and corporate treasury are just a few examples
Institutional investor
For consumers, interest rates represent the game from deferring consumption from today to tomorrow via saving. For businesses, interest rates represent the cost of borrowing money.
Interest rates
Neutral funds that invest anywhere in the world except for Canada
International funds
Violations are carefully scrutinized and offenders may be prosecuted; the commission has the authority to subpoena witnesses, seize documents for examination and assume many functions of an administrative tribunal. The securities commission may also prosecute an action against a violator. This may be a result in the levy of a substantial fine and/Or imprisonment
Investigation and prosecution
Me act on the clients behalf as agent in the transfer of instruments between different investors, and may also act as principal. Investment dealers are also referred to as brokerage firms or securities houses.
Investment dealer
How familiar an investor is with the risk and return characteristics of securities
Investor knowledge
Units or traded on the Toronto Stock exchange and are bought and sold through stockbrokers. The S and P/TSX 60 is composed of 60 of the largest Canadian firms
IShares Canadian S and P/TSX 60 index fund
The sum of the population aged 15 years and over who are either employed or unemployed
Labor force
The obligation to provide goods, services, or cash at sometime in the future. Simply stated: what is owed by a firm or an individual
Liabilities
The basis of the hypothesis is that as people age, their objectives, financial and personal circumstances, and risk tolerance change as well. The with the hypothesis is not infallible, it can facilitate the task of knowing your client
Life cycle hypothesis
A contract between an insured holder and ensure, where the insurer promises to pay a designated beneficiary is some of money in exchange for a premium, upon the death of an insured person
Life insurance
A type of partnership whereby a limited partner cannot participate in the daily business activity and liability is limited to the partners investment
Limited partnership
The financial ratio that attempts to determine a firm’s ability to meet its short-term liabilities from its current assets
Liquidity ratio
When a commodity contract has reached it’s permitted daily price limit on the upside, the commodity is said to trade walk limit up. When the walk limit up [or lock limit down on the downside], trading can only take place at the lock limit up price or lower on that day
Lock limit up
The holder of a locked in plan cannot withdraw any of the money until the older reaches a particular age depending upon the providence of residence
Locked in our RRsp
Signifies ownership of securities. “Tatian I am along 100 B.C.E. common close quotation means that the speaker owns 100 common shares of BC E ink
Long position
Or why abilities that are not likely to be paid off within one year
Long term liabilities
Involves the active trading of derivatives products and strategies on physical commodities, financial assets and currencies
Managed futures
Professionally managed portfolios of basic asset classes and/or commodities. Components of manage products could include segregated funds, hedge funds, commodity pools, closed end funds and principal protected notes
Managed products
These fees are charged by all mutual funds and are deducted from the fund itself to pay the fund managers or investment advisory services
Management fees
An account that uses money borrowed from a stockbroker to buy securities
Margin account
Any arrangement whereby products and services are bought and sold, either directly or through intermediaries
Market
The overall attitude of investors toward any particular stock or the stock market in general
Market sentiment
Bonds for which there is a ready market
Marketable government bond
The date at which the bondholder expects to get the par value of the bond back
Maturity date
The minimum dollar value of the contract after the guarantee., Usually 10 years. This amount is also known as the annuity benefit
Maturity guarantee
A central value of a set of numbers. Or, the some of the values divided by the number of values. Also known as the average
Mean
And aggregate that measures the quantity of money held by countries households, firms and governments. It includes various forms of money or payment instructions grouped according to the degree of liquidity
Monetary aggregates
The fact of excepting cash or assets obtained illegally and making it appear legitimate. It is a criminal offense punishable under Canada’s criminal code
Money laundering
A type of registered pension plan; also called a defined contribution plan. In this type of plan, the annual payout is based on the contributions to the plan and the amounts those contributions have earned over the years preceding retirement. In other words, the benefits are not known with the contributions are
Money purchase plan
Individuals who are licensed to sell and provide advice on mutual funds products to their clients in the province or territory where they have been licensed
Mutual fund sales representative
Also called the full employment unemployment rate. At this level of unemployment, economy is thought to be operating to add closest to its full potential or capacity
Natural unemployment rate
Hey profitability ratio that indicates how efficiently the company is managed after taking into account both expenses and taxes
Net profit margin
The corded or stated rate on an investment or loan. This rate allows for comparisons but does not take into account the effects of inflation
Nominal interest rate
A transaction in less than a board lot
Odd lot
Method through which the Bank of Canada influences interest rates by trading securities with participants in the money market
Open market operations
An investment into an RRSP that exceeds deal out amount of contribution. The over contribution is not tax-deductible, I need to individual may be subject to a penalty if the over contribution exceeds a cumulative lifetime over contribution limit of $2000
Over contribution
The interest rate that is set in the marketplace called the overnight market where major Canadian financial institutions Lend each other money on an overnight basis
Overnight rate
These include clients age, whether they are single or married, how many children they have, and what kind of lifestyle they wish to maintain. They have a major impact on the ability of the investor to bear risk and on the financial goals selected
Personal circumstances
The personal information of a person than me include age, marital status, number of dependents, risk tolerance and health and employment status
Personal data
A graph showing the relationship between inflation and unemployment. The theory states that unemployment can be reduced in the short run by increasing the price level [inflation] at a faster rate. Conversely, inflation can be lowered the cost of possibly increased unemployment and slower economic growth
Phillips curve
A trust registered it with Canada revenue agency and established by an employer to provide pension benefits for employees when they retire. Both employer and employee may contribute to the plan and contributions are tax-deductible
Registered pension plan
This refers to the selection of the classes of securities to be held the proportions of equity, debt securities, and money market securities.
Portfolio Asset allocation
Mutual funds that invest in other funds instead of buying securities directly
Portfolio funds
The goods and services and economy is capable of producing when it’s existing inputs of labor, capital, and technology or fully employed at their normal levels of use
Potential GDP
Automatic purchased plans or contributions, where investors can purchase units in regular installments throughout the year
Pre-authorized contribution plan
The underwriting of a security and it sale to a few buyers, usually institutional, in large amounts amount
Private placement
The provincial fee charged for authenticating I will. The fee charged is usually based on the value of the assets in a state rather than the effort to process the will
Probate
The part of a company’s revenue remaining after all expenses and taxes have been paid and out of which dividends may be paid
Profit
Mutual funds that offer similar benefits as segregated funds, like the guarantee of the initial investment after [usually] 10 years and reset options. These funds, however, do not usually provide death benefits upon the death of the unit Holder
Protected funds
This is the market for commercial or residential properties
Real estate market
The nominal rate of interest minus the percentage change in the consumer price index
Real interest rate
The act of keeping and maintaining accurate financial records
Record keeping
Also known as back and load
Redemption fee
A trust registered with Canada revenue agency and established by an employer to provide pension benefits for employees when they retire. Both employer and employee may contribute to the plan and contributions are tax deductible
Registered pension plan
Everyone who sell securities, or councils and advises investors, must be registered with the appropriate provincial or territorial securities administrator. This is to monitor the competency and ethical behavior of people involved in the selling of securities
Registration
A term that indicate the amounts a company usually pays on an annual basis
Regular dividend
Individual investors who buy and sell securities for their own personal accounts, and not for another company or organization. They generally buy in smaller quantities then larger institutional investors
Retail investors
A description of the type of risk associated with a particular investment
Risk profile
The financial and psychological readiness of an individual to bear the date today fluctuations in the value of their investments. People who are unable to tolerate risk are said to be risk averse. Those who like to take risks or risk tolerance
Risk tolerance
The rate of return that is adjusted for risk to be able to compare the performance of two securities on the same basis
Risk adjusted rate of return
Describes the extent to which gross domestic product must be reduced with increased unemployment to achieve a 1% decrease in the inflation rate
Sacrifice ratio
The amount of money not needed for current expenditures
Savings
This is the market for securities that have previously been sold by the issuer. When an investor purchases the security through a broker, this is said to be a secondary market transaction
Secondary market
The selection of the specific industries from which stocks in the portfolio will be chosen
Sector weighting
Paper certificates or electronic records that evidence ownership of equity or debt obligations
Securities
A general term referring to the provincial regulatory authority responsible for administering a provincial securities act
Securities administrator
Refers to the evaluation of risk and return characteristics of securities
Security analysis
A fixed income for us to be for bonds that involves fundamental and credit analysis and quantitative valuation techniques at the individual security level
Security selection
A bond or debenture issue in which a predetermined amount of principal matures each year
Serial bond
A person who purchases a stock is a shareholder of the company that issued that stock
Shareholder
Registration of only a simplified prospectus for new issues
Shelf registration
The only source of capital is savings. Capital comes from retail, institutional, and foreign investors
Sources of capital
An investor who seeks out higher risk funds and investments that offered the possibility of higher returns
Speculator
A mutual fund composed of Canadian common stocks that seeks to earn some combination of dividend income and capital gains
Standard equity funds
The financial statement which shows a company’s revenues and expenditures resulting in either a profit or a loss during a financial period.
Statement of comprehensive income
A financial statement showing a company’s assets, liabilities and equity on a given date
Statement of financial position
Changes any managers investment style over a period of time
Style drift
The quantity of a good or service that producers are willing to supply any particular price during a given time period.
Supply
In the case of an individual, surplus funds apply to money that is not immediately needed to support a lifestyle – buying groceries, paying the mortgage and so on. In the case of companies, surplus funds might result from a temporary imbalance between the times that a company receives cash from its clients and the time that it must pay suppliers for goods it has purchased.
Surplus funds
Referred to as a statement of trust income allocations and designations. What a mutual fund is held outside a registered plan, unit holders of been unincorporated find is sent a T3 form by the respective fund
T3 form
Referred to as a statement of investment income. What a mutual fund is held outside he registered plan, shareholders or send a T3 form by the respective fund.
T5 form
Mutual fund that adjust its asset mix to move from more risky to more conservative as the maturity date of the fund approaches
Target date funds
A government sponsored saving plan where in vestment income earned in it is tax free
Tax-free savings account
The time between the issuance of a fixed income security and it’s maturity date, at which the issuer will pay back the principal
Term to maturity
Leaving the employer and transferring internally within the company to another province
Termination
Terrorist financing [proceeds for crime] provides funds for terrorist activity
Terrorist financing
Calculated by adding up the outstanding amount on mortgages and loans, as well as unpaid bills
Total liabilities
The amount of brokerage fees and commissions paid to buy and sell securities within a mutual fund
Trading costs
Is responsible for maintaining records of who owns the mutual funds units. This function is usually performed by a trust company
Transfer agent
Is charged with a mutual fund investor wishes to switch investment out of one fund and into another fund with the same mutual fund company
Transfer fee
Constructed by selecting a base. [Usually treating the ratio from that period As 100] and then dividing the base period Into subsequent periods. Trend ratios are useful for spotting trends and making comparisons between companies
Trend ratios
For bondholders, usually a trust Company appointed by the company to protect the security behind the bonds and to make certain that all covenants of the trust deed relating to the bonds are honored. For a segregated fund, the trustee administers the assets of the mutual fund on behalf of the investors.
Trustee
Is charged to investors who hold mutual fund investments as standalone rrSP, or RrIF, and are resP investments
Trustee fund
The trait of deserving trust and confidence
Trustworthiness
Orders of mutual funds that have not been recommended by the sales person but instead come from the clients
Unsolicited orders
Individuals, companies, and governments that levy money by borrowing or issuing shares for a number of reasons
Users of capital
This is measured by the value of an investor savings, investments, and assets. When their value grows at a rate that exceeds the inflation rate, wealth increases
Wealth
